Mumbai police on Saturday arrested a former general manager and head of accounts at New India Cooperative Bank on embezzlement charges of Rs 122 crore. Between 2020 and 2025, the money was allegedly stolen from the bank with the help of an accomplice.Following the Reserve Bank of India’s action to place the bank under restrictions due to alleged financial misgovernance, the bank’s board of directors was removed for a year for “poor standards of governance,” and Shreekant, a former Chief General Manager of the State Bank of India, was appointed as the administrator to oversee the bank’s operations.According to the police, Mehta and his accomplice robbed the bank’s vaults at the Prabhadevi and Goregaon offices after considering a criminal plot. After discrepancies in the bank’s records were discovered, the purported swindle was exposed. A police probe resulted from an internal audit that raised concerns about the missing monies.The EOW officials noted the declaration of a senior bank official and registered an FIR at the Dadar police station. The FIR was registered under sections 316(5) and 61(2) of the Bharatiya Nyaya Sanhita (BNS), which prescribe criminal breach of trust and criminal conspiracy.Since the restrictions placed on it by the RBI have prevented the bank from issuing new loans, investing, borrowing, or allowing any deposit withdrawals for six months, a directive has been passed for the bank not to issue or roll any new loans and advances, make any investments, bear any liability, including borrowing any money or sit on any new deposits without prior approval from the RBI.“I am horrified by the alleged Rs 122 crore embezzlement from New India Cooperative Bank. It raises serious eyebrows about the internal controls and governance, how the former GM, Hitesh Mehta, and his accomplice were able to coalesce together and siphon that huge amount without any hindrance.The RBI’s decision to supersede the bank’s board and appoint an administrator is indeed a right move but brings tremendous uncertainty against the regulatory oversight and the charge leveled on the RBI itself for not preventing this from happening.The depositors and the whole banking system need to be taken into serious consideration in this particular case. While it is imperative to ensure that such financial scams do not crop up again, it is all the more essential that effective actions are taken to make sure the public has faith in the system. The remedial measures should comprise keeping in mind proper internal controls, better governance, and tightening regulations. Restoration of the system’s credibility and donor security will be possible then.” Sandip De, an ex-employee of central bank had a discussion with true-to-life.The developments had left depositors of the bank in a confused state, with thousands waiting in long lines outside bank branches to obtain information about the safety of their funds. As of March 2022, New India Cooperative Bank had a network of 30 branches and deposits amounting to Rs 2,436 croreThe step taken here honors the very first major action launched against a cooperative bank in Maharashtra ever since the scandal-laden collapse of the Punjab and Maharashtra Cooperative (PMC) Bank. RBI has intervened in the public interest through plethora of efforts to ensure that the system remains stable and the depositors are well-protected.Mehta will be produced before the court this Sunday, and further investigations of the alleged scam will be conducted by the EOW. The investigation has highlighted the need to improve transparency and accountability in the banking sector, especially the cooperative banks. Stay updated with the latest news.
By Anusmita Bhatta
Reporting for True To Life News Media Pvt. Ltd.